Private Schooling is Saving the Day

Private Property South Africa

Anna-Marie Smith •
Feb 5, 2013

Insatiable demand for educational excellence is mobilising a positive economic impact on property, both residential and commercial. As elsewhere in the world, governments’ responsibilities include the provision, as well as access to quality schooling to every child, should its location be rural or urban. However, as state schools are losing its lure, more private schools are providing a welcome, yet costly alternative. And, when affordability is a hindrance, some parents go as far as entering the slippery slope of borrowing money to facilitate quality schooling for their offspring. This for the simple reasons of quality, reliability, and sustainability.

No wonder then the unprecedented desire for quality private schooling, nationally. And less surprising is increasing investment into exclusive lifestyle estates in return for optimum levels of education and security. And, close on their heels are large commercial property companies, facilitating both retail and office facilities for high end consumers, further extending a positive economic impact that support capital growth in high demand areas. If the JSE’s property sector’s performance over the past seven years is anything to go by, and without expecting a repeat of last year’s average returns of 35.5%, it does indicate market confidence.

A distinct pattern is seen in high premiums paid for locations close to private schools where adjoining residential estates facilitate short, safe walking and commuting distances between homes, campuses and shopping malls. A typical example is seen in Cape Town’s Silverhurst, Silvertree, Stonehurst Estates, and Steenberg Golf Estate, all surrounded by Steenberg Shopping Mall, Westlake Business Park and Virgin Active Health Club. These estates overlook the premises and sports fields of the independent Reddam School and College on one side, the US Embassy on the other, and Pollsmoor Prison, just down the road. Growing investment has also taken Reddam Schools beyond local borders, to Sydney, Australia.

Both long and short term property buyers are gravitating toward unprecedented capital growth areas, as seen in Stellenbosch and Rondebosch, where good schools feed the University of Cape Town and Stellenbosch University. Property professionals say some houses are re-circulated within the market over five, and up to ten years, while long term investors are satisfied by rental contracts with inflationary increases.

The results of business entering this fold as far back as 1998, is also seen in two of the largest private educators in the country owned by public companies listed on the JSE. When considering difficult trading conditions globally during the past four years, both Advtech Group and Curro Holdings have shown improved market performances, exceeding short term growth expectations.

In addition to its main board listing, the Advtech Group, owner of prestigious labels nationally including 22 Crawford Group of Schools,Trinity House, Varsity College and Vega among others, the company is currently in its sixth year on the JSE’s Social Responsibility Index (SRI).

Curro Holdings, who recently moved its listing from the General Retailers Sector to the JSE Main Board, acquired Limpopo’s Northern Academy for R157-million last November. It recently opened new doors in the fast growing suburb of Century City, where the Curro Private School’s enrolment of over 300 pupils for the 2013 academic year exceeded expectation. The group’s portfolio now extends beyond large suburban centres, also offering superior quality schooling in the outlying coastal areas of Langebaan, Hermanus and Mosselbay.

Quality education is recognised as the core to economic growth, and is motivated through the philosophies of private business. As in the words of Curro Holdings CEO, Dr Chris van der Merwe, that the group is prioritising competitive curriculums to be taught through intensive teachers’ training, to enable high standards of Mathematics, Natural Science and Technology, from foundation phases upward.